It can be challenging to match projects with high-level company goals when businesses increase in size. Senior management often has difficulty prioritising projects, allocating resources, and maximising efficiency. Project portfolio management (PPM) is the solution in this scenario.
While many PPM software vendors advertise various tools and functions unique to their product, it can be hard to decipher what is key to achieving successful PPM. This blog outlines the three core functionalities that all PPM solutions should provide.
What is PPM?
PPM stands for Project Portfolio Management, used by project managers and project management organisations (PMOs) to determine how much they can accomplish in a project. PPM software aids project managers and PMOs in this process by providing a platform that consolidates and simplifies all project-related information and data.
Why do you need PPM?
According to a 2020 study, the most significant challenge to project management is poor PPM implementation. It resulted in poor resource management and project managers being overburdened with too many projects to manage.
According to the Association of Project Management, PPM is a factor in delivering positive change in the future of work. PPM software is universally applicable to all types of businesses. PPM increases the likelihood of project success while also improving cost, time, and labour efficiency. Here are the three main approaches they use to deal with it.
- Managing data – PPM software takes care of a lot of the administrative work for you, simplifying and concisely summarising data, saving you time.
- Optimising resources – Provides a clearer picture of how much is required for each aspect of a project, resulting in cost savings.
- Forecasting, scheduling, and risk management – Keeps workers on track and identifies potential roadblocks before they occur, saving you time and effort.
The three core functionalities of PPM:
Reporting
Perhaps the most crucial function PPM can provide in terms of time-saving. 50% of respondents to a recent survey said they spend one or more days manually collating project reports.
The use of formal and informal reports to convey the status of your project is known as project reporting. If you have ever managed a project, you will understand that stakeholders frequently demand to know your project strategy and progress even before you start. The importance of reporting stems from these early and continuous requests for information. Suppose you cannot report on your project regularly. In that case, it will not only get away from you, but your stakeholders will be unhappy as well.
You can remain on top of your projects and manage the expectations of others, such as your stakeholders and team members, with project management reports. Reports enable you to keep track of and share the scope, time, budget, and status of your project to everyone who needs to know at any time.
In short, how will you produce reports if your PPM tool does not provide project reporting functionality?
Advantages of a reporting function:
- You or your executives are not compelled to make critical choices based on hours or even weeks of out-of-date data. Instead, you may monitor the status of your project right away.
- Real-time reports, which can be viewed immediately in your project management software, may help you spot problems early, pinpoint missed deadlines, identify overworked team members, and indicate unassigned tasks.
- Furthermore, the utilisation of live, interactive reporting improves team collaboration. Team members can readily see what they are working on, what the rest of the team is up to, and how their work affects the project. As a result, there will be less waiting and more action.
- You may help align everyone with a single picture of projects by using standardised reports to spot issues, convey status, and drill down into specifics. Stakeholders may rapidly get familiar with and comprehend their provided reports regardless of which project they are looking at or who accumulated the information.
Risk Management
Did you know that 70% of all projects fail to deliver on their objectives? Risk management processes reduce this likelihood by 20%. Risk management entails risk assessment, containment, and mitigation. Project managers must have a risk-prioritisation plan in place to be ready when a risk arises. Risk management will necessitate using the entire project team’s experience and knowledge to help monitor and update changes in the situation.
Risk management will entail the following:
- Identifying risks and the factors that cause them
- Risk classification and prioritisation
- Make a strategy that links risks to a solution.
- Throughout the project, there will be monitoring to identify risk triggers.
- If a risk becomes apparent, take action to mitigate it.
- Keeping team members informed about the status of the risk
How does PPM software manage risk?
PPM tools manager risk through what is known as a RAID log. RAID stands for Risk, Actions, Issues, and Decisions:
- Risks are the problems that could arise in your project. Risks are frequently thought to harm a project, but positive risks also exist.
- Actions are what you need to do during a project.
- Issues refer to something that has gone wrong during a project. If an issue is not managed and resolved, the project can become derailed or fail.
- Decisions are the actions you took in the project.
A RAID log enables you to think about a project systematically and in a planned way. A project consists of a constant array of decisions that would be incredibly difficult for one person to manage. The RAID log records those choices, giving you and your stakeholders a complete record of all the decisions taken during the project’s life cycle, along with justifications for why they were made and when.
Financial Management
Projects have a reputation for taking longer than expected and going over budget. Research shows that 9.9% of every dollar is lost because of poor project management. If $1 billion is invested, $99 million is wasted. When you compound that by every potential and existing project, it becomes apparent why keeping track of the portfolio’s finances is so important.
Dashboards are an excellent method to keep track of your financial situation with PPM software. They use pie charts, graphs, and other visual tools to present information in a bright, visual manner. Dashboards make it simple to receive a quick overview of key KPIs and measurements.
Another important aspect of managing your finances is using budgeting and forecasting software. By recording project budgets, bids, and current spending, you can plan and forecast future projects, schedules, and expenses.
Tracking time and spending is an integral part of budgeting. Employees can register their hours on timesheets provided by PPM software. Some systems can immediately update the budget, providing you with a real-time perspective. You will also be able to approve billable and nonbillable hours, as well as establish pricing and more.
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